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tv   Bloomberg Markets Americas  Bloomberg  February 10, 2020 10:00am-11:00am EST

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alix: it's 10:00 a.m. in new york, 3:00 b, london, and 30 minutes into the trading day in the united states. guy: this is "bloomberg markets ." alix: the s&p eking out again. -- but what iat am really watching his copper. if copper can get a real bid here, that could be indicative of a stronger risk on response, but now down 0.2%. does not feel like a buy the dip scenario may be in the cards. guy: bhp overnight talking about the fact they are looking for delayed copper shipments to china. that is certain to affect that market as well. here, stocks are soaring, but we are flat on the stoxx 600. irish equities under pressure after results over the weekend, irish banks in particular.
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mining stocks trading lower today. also seeing weakness in the single currency, down by 0.2%. dollar strength persisting. we also have the story in merkel'sith angela political success are stepping down. that is a surprise. we are continuing to watch what is happening with the coronavirus. that makes a significant inroad into what we are talking about. we are joined now by mark haefele, ubs both management global chief investment officer -- ubs wealth management global chief investment officer. he joins us now. is it a market story? how do you think it will be factored in over the coming quarter? it is a market story based on fear causing a wider reaction in the economy. like everyone else, we are focused on what is the direct
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impact and how long it is going to last. i think in our analysis, while the number of cases has been rising, the death rate remains someively low, and despite cases breaking out in singapore, certainly a developed market, this remains contained, and therefore, we think it is more of a v-shaped reaction that some have talked about. guy: if this is a market risk story, why is the s&p up 2.5% over the last five days? why is the cac 40 up and the dax up even more? , it is think that there worth taking a little longer at the macro environment and some of the things we've seen since the beginning of the year. i think some of the forces that
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we saw last year are carrying through. when i talk to clients around the globe, i just completed a world tour for our lookahead, clients are saying i kind of got caught up in the headlines last year and missed some of the bigger forces around the central bank support and the asset allocation moves toward equities , and they are still playing catch-up to a degree. alix: i'm glad you brought that up in terms of central bank liquidity. one thing that is different than sars, for example, is the amount of money the pboc can inject into the market. we saw that over the we can. they could spend $10 billion to support the economy. how much more of a constructive risk on tone is coming from that kind of liquidity? mark: i think if you are talking about the factors we've seen over the past couple of weeks, certainly the expectation that china will continue to do what
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is necessary to support the economy through this shock. that is something that investors are looking at. i also think that last week, the strength of the u.s. market in part had to do with the strong jobs number in the united states, and also the rise in the polls around the chances of reelection for president trump. surprisingly, among international investors, they are watching this election very closely. alix: earlier in the month, you had a note out that this was the time to buy em and chinese stocks for a longer term view. would that still be your favorite call, or is there a different call you want to make? mark: we think so. i think bloomberg has put out a great chart today showing the difference between u.s. equities
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and chinese equities has never been greater on a forward pe basis. that speaks a little bit to some of what we are seeing in terms of valuation here. we think as we go forward, as we recover from this coronavirus shock, the eem growth rate overall will pick up relative to the em growth rate, and that some of that lower valuation will be recovered. time to be good shifting some of that exposure from the very successful developed markets and the success in the u.s. towards em equities. the dollar keeps going up, though. isn't that a headwind for that em trade? think that we do this will be a year where some of that dollar strength starts to come out.
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in the short term, the dollar is the safe haven, but there are several factors that make us think the dollar strength is not going to continue for the rest of the year. first, when the fed was hiking rates last year, the spread between the 10 year and the bund continued to grow. money toward the united states sent investment flows to the united states. that pressure has abated a little bit. powerly, on a purchasing parity basis, the parity power has -- the purchasing power has been strong for some time. once we get through this virus, some of the political forces likely heightening trade dispute, as that comes out of the safety trade a little bit, we would expect evaluation between the dollar and some of these other currencies to normalize a little bit. guy: what do you think of the
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trade around europe? clearly, the german economy didn't have much moment in going into the coronavirus crisis, as a result of which is very exposed to what is going to happen next out of china from the demand side in q1. we've now got political paralysis in germany as well, which probably further pushes out the idea that we could see fiscal stimulus. what do you make of the idea of putting money to work we are now in europe? mark: we've been underweight in europe. it had a strong run on some resolution of the trade tensions in the fall, but i think europe remains caught a little bit between the united states and china as an export economy. it doesn't necessarily control its own destiny to the degree of some of these other economies. i think what we are seeing in
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germany has several repercussions. states or in china, there seems to be more of a willingness to deploy fiscal measures if there is something of a slowdown, and we just haven't seen that will yet out of europe. i think that creates more of a medium-term risk for europe. that is why we are underweight it versus other equity markets. alix: what if you are wrong in that? what is the china recovery is a u or an l? what is the u.s. election gets more confusing? how do you hedge now versus maybe how you would have been hedged in december? mark: it's a good question. i think that one of the things that we would do to look towards hedging his be a little more focused on dividend stocks.
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there is no perfect hedge in this market. there's no way to hedge for a strong rebound in inflation that forced central banks to pivot once again. dividend stocks, however, can kind of shield you a little bit from some of the equity volatility, but still take advantage of the search for yield and the movement of the marginal dollar away from fixed income towards another source of yield like equity. one of the things our clients are looking at is gold, and we think it could finish the year $1500. it is not some than we want to add to our long-term allocation, but we think clients recognize that should things go completely wrong and inflation start to pick up again, it may be an asset that gives them that measure of insurance against some of the things you described. alix: mark, thank you very much.
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perspective.our mark haefele, ubs wealth management global chief investment officer. now we want to check in on the bloomberg first word news. here's viviana hurtado. viviana: polls show bernie sanders has the lead ahead of the primary in new hampshire. pete buttigieg is second and amy klobuchar third, but about 1/3 of the voters could still change their mind. president donald trump's new budget would spend millions more on defense, cut social programs, and at almost $1 trillion to the debt. still, the president's budget is more of a political document because the u.s. congress has to appropriate the money, and lawmakers aren't likely to finish work on the budget until after the presidential election. a big takeover in the mall operators industry. simon property group agreed to buy a rival in an all-cash deal valued at $3.6 billion.
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that represents a 51% premium. bloomberg has learned since late last year, simon and taubman had been holding talks. a wave of retail bankruptcies have put pressure on mall operators to consolidate. in hollywood, a historic night at the oscars. south korean movie "parasite" becoming the first foreign line which film to win the award for best picture, also winning for best director, best original screenplay, and best international picture. a disappointing night for netflix. only two oscars. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. guy: thank you very much, indeed. we are awaiting remarks from the german chancellor angela merkel, stepping out with viktor orban, hungary's prime minister.
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they have a pretty tough relationship. this comes amid a major upheaval in german politics. angela merkel's successor announcing plans to step down as the lead of germany's biggest party. more on that story coming up. this is bloomberg. ♪
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♪ alix: live from new york, i'm alix steel. happy monday, everybody. guy: from london, i'm guy johnson. this is "bloomberg markets." let's hand things over to abigail doolittle. abigail: on this monday, we are looking at what is probably a neutral risk appetite. the s&p 500 and the dow
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transports at this point slightly higher. earlier, i that lower. in europe, we see -- a bit lower. in europe, we see the ftse down. the hang seng down about 0.6%. of course, fears around the coronavirus and what it could mean for the global economy. the impact continues to weigh. bonds are higher on the day. once this started, risks are the decline, bonds winning. crude oil down about 15%, copper down 10%. both of those commodities in a correction. china is the world's largest user of natural resources, so the commodity complex really getting hit. 6%also have the csi 300 down , the dow transports down 4%. on the day, the s&p 500 managing a small gain, but in green, treasury note futures, bonds really doing the best. investors seeking safety during
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this time of uncertainty and tragedy. --for into residual movers as for individual movers, wynn resorts down again. there macau resort has been shut down by the coronavirus. it is a clear example of how something goes from headline risk to the bottom line, really affecting the numbers. carnival is up slightly, royal caribbean down. we have situations where trapped, cruise ships around the coronavirus with some passengers actually having it. quite a few on that one off the coast of japan. united airlines down 1%. the travel and leisure sector continues to be hit. we do have a bright spot around china, and that is tesla, up 4.6%. their shanghai factory did reopened today. shares higher on the year, up more than 80%. guy: definitely up on the year. thank you very much indeed. let's stay with our theme. chinese consumer prices rose at the fastest rate in more than
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eight years last month is a fallout from the coronavirus outbreak could cause even faster inflation. now the pboc is stepping up efforts to support businesses. joining us from beijing on the : asia "bloomberg market open" host tom mackenzie. are we seeing any signs of stabilization when it comes to the numbers? tom: i think there's a number of things that keep who officials awake at night. one is the epicenter of this one is the epicenter of this disease. they are looking at 10 other provinces for potential hotspots. they haven't seen those yet, but clearly they are monitoring those 10 other provinces very closely, including the tech hub of china. that is a focus, as is the spread between individuals outside of china who have no history of travel in china. we heard that concern expressed
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by the head of the world health organization. in terms of the cases of infection, they have started to stabilize. this is according to the who quoting some of the stats they've been getting from their chinese counterparts. the number of infections started to fade. in terms of the death rate, about nine under 10 cases -- about 910 cases. it is well above the level we saw around sars. alix: part of what we have seen instrument is action from the pboc, as well as the government pushing banks to lighten up on loan rates for companies and businesses that are really affected. can you walk me through the funnel of money that has been happening in china? up: the pboc today stepped the liquidity injections, both seven-day and 14 day reverse repos, about 100 winning nine u.s. -- about $129 million
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total. financial market stability is key when it comes to those kind of actions, of course. as you rightly say, the central bank has also set up a special relenting fun -- a special re-lending fund. overall, the government will spend about $10 billion u.s. to try to control the virus and put something of a floor underneath the economy. clearly, the likes of ubs, goldman sachs all downgrading forecast.cast bloomberg intelligence thinks we should expect to see more cuts of the reserve ratio rates and a guiding lower of the loan prime rate going forward. guy: we have finally seen xi jinping out and about. we got the video of him wearing a mask, having the temperature check. why the absence, and taught me through the political narrative that goes behind what we are
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seeing with the coronavirus. clearly, this is a political story. how much anger is there in china? what is the political story that goes with corona? tom: the key question, why the absence, is one we are all scratching our heads over. he hasn't been on the front pages or on major state-run tv for about a week on us of this is crucial. and met someoday medical workers, went to some hospitals, had his timber checked. that is -- had his temperature check. that is something that happens to me every time i go out and come back again. some analysts we have been speaking to suggested that this is a key strategy and a classic strategy for top leaders. they want to stay at a distance, so if anything goes wrong, they can blame it on their underlings. will come out xi
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and take credit. but certainly, there is pressure unlike we have seen for a long time. we seeing i mix and experts saying that there needs to be more openness and transparency around these issues, particularly after the death of the whistleblower in wuhan which really did stir anger the likes of which we haven't seen for many years in china. alix: appreciate that, bloomberg's tom mackenzie. we are waiting for the world health organization press conference to begin in geneva. waiting for headlines to cross on that as they continue to battle the coronavirus worldwide. this is bloomberg. ♪ >> the question that will begin at who tomorrow with the experts, are you inviting experts from taiwan to be here in geneva? ♪
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alix: the fallout of the coronavirus may be only beginning in the tech space. manufacturers are restarting their factories, but no one knows how deep this will go for
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the tech giants. joining us now is bloomberg's michael regan. one is the fundamental, which is the supply chain issues and what is happening in china. the other is, if you want to beat the benchmark, you have to own tech. reporter: true. as far as the tech market reaction to this, the market's doing a good job of separating companies that are seeing demand lost permanently. say, if you are an energy producer or a cruise line operator or travel company. if you are losing business right now, it is gone forever. tech, as far as hardware and iphones, that demand is just going to stay there and get bigger while these factories are shut down. the tech sector hasn't really seen the kind of hit that you might expect because of the supply chain disruptions because i think the market is just figuring they will get open eventually, and that demand will just be ready for them when they open. that said, when you look at
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apple, it is trading at 25 times earnings, the most extensive it has been since 2008. a lot of good things priced in for that stock, and the longer there'ssruptions go on, discussion about how long these factories can get back open and up to speed. you really need to be humming along to get all of the components you need. on,ink the longer it goes if these openings proved to be a bad idea and it was too soon to open, i think the more concerned investors will be. for now, they are looking past this is a seasonal anomaly. alix: what is going to change that conversation? right?ger it goes on, second quarter, third quarter. michael: exactly. earnings estimates across the board are very optimistic for
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later in the year. they are going to start coming down. a lot of companies have given a vague warning that there will be material impact, but haven't put hard numbers on it yet. i think it is important to watch this week and see how smoothly these tests of foxconn and others go. it is very aspirational on their part to open the soon. alix: and they all have to have surgical masks and all of that stuff to go back. thank you very much. still ahead, the upheaval into mom politics -- in german politics. we will see what it means for the future of the country. this is bloomberg. ♪
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♪ alix:alix: live from new york, i'm alix steel. guy: from london, i'm guy johnson. this is "bloomberg markets." let's get to the bloomberg first
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word news with viviana hurtado. viviana: breaking news moments ago from the u.s. justice department. prosecutors charging four embers of china's military with breaking into computer networks of equifax, the credit reporting firm, accused of stealing data on almost 150 million people. the data breach was disclosed in 2017. now to the coronavirus. it could end up infecting at least 500,000 people in the chinese city at the center of the outbreak. that would be one out of 20 residents in wuhan, according to the london school of hygiene and tropical medicine. the global death toll from the virus now stands at least at 900 10, higher than during the sars epidemic 17 years ago. in the united states, amy klobuchar is making a late surgeon new hampshire. two tracking polls have her in third place among president to hopefuls the day before tomorrow's primary. bernie sanders and pete buttigieg are running 1-2.
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ms. klobuchar getting hyper marks for her closing are but -- closing argument in friday's debate. the former political wing of the will feature in coalition talks -- of the ira in finishing -- the ira in sinn fein will feature in coalition talks. dayal news 24 hours a global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. guy: thank you. let's stay with european politics. german chancellor angela merkel's successor has resigned as leader of the christian democratic union. annegret kramp-karrenbauer also says she won't run for chancellor. known, spoke to
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bloomberg from dabo's about what davos about what the cdu needs to do. >> cdu needs to have a new structure. it needs to have new people. our chancellor will no longer be available, so in 2021, we need a future oriented team with new faces, and we will put that together during the course of this year. guy: joining us for more is bloomberg's chad thomas. he spoke to akk in the swiss alps. is this a surprise? chad: a big shocker in berlin today. akk has been under pressure for some months now. her poll numbers are not terrific, and there's a real division within the party, and she has been trying to heal that , but the events that happened
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in the eastern german state over the last week really accelerated this, and it was very clear that she did not have control over people in the party. she openly said that she had told the local party members not to align with the far-right afd in this boat they took last week , and they basically said we don't care and when ahead with it. she was still struggling to gain some control there, and ultimately said today that she acknowledged the divisions and that it was time for someone else to step in and take control in the party, and also to prepare for the next election, which is about a year and a half away, if not sooner. alix: if i look at market reaction as this is starting to go down on wednesday, the euro-dollar has been slowly grinding lower. i would expect may be a more severe market reaction to something this dramatic. what is your take on that? chad: i think what the market reaction is showing is that, even though we have seen such a
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big shakeup here in germany, there is still a relatively stable country, and the christian democrats are still the biggest party here. while we don't know who is going to lead that party going forward, we are a year and a half away from the next election, and at least at this point, merkel is still firmly in control. merkel spoke about half an hour ago and made it very clear that she is going to insert herself directly into this process to akk asthe successor to party leader, and the person who will potentially succeed her as chancellor should they win the next election. merkel, over the last year, really stepped back from the domestic political front, but making it clear today that she intends to get much more involved again going forward. guy: the showing on screen right now, pictures of some of the potential frontrunners to replace akk. what is your sense of who the
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frontrunners within the frontrunners are? who is leading that pack? chad: the two people that people in berlin are really talking -- talking about laschet, something that merkel would really like to have. the other person is jens s pahn. forctually ran against akk the leadership post, and people privately within the party tell you that he is definitely ascendant at the moment. he's more on the conservative side in the party, and could be someone who could actually potentially bridge this gap we see between the people that are more to the left within the party and those on the right who say that they need to move further to the right to deal with the assent of the far-right afd. guy: busy day. thanks for taking some time to talk to us. chad thomas joining us from
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berlin. -- now that the u.k. has won its trade freedom from the eu, they are aiming to hold up to five sets of trade talks simultaneously. joining us for more on that story, berg opinion economist teresa fail -- economist teresa therese reconomist aphael. do we have the ability, disburse johnson have the bandwidth, to be able to negotiate five trade deal simultaneously? therese: that is one of the many big questions that needs to be answered. u.k. hasn't actually done a trade negotiation in nearly half a century, as a member of the eu. the first job has been lawyering up, and that they have done pretty effectively. there are more lawyers, trade in the apartment of
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international trade than there are in ustr, i'm told. on that level, britain is probably ready to do multiple deals, but the question is how you do different deals at the same time. the big prize is obviously a trade deal with the european union. the next is a trade deal with the u.s.. they are going to have very conflicting objectives, and indeed, very different regulatory systems, and those are going to have to be reconciled during these negotiations. alix: what trade deal potential he is most likely to actually get done? therese: i think the priority still has to be to deal with the eu. johnson would consider it a failure of sorts if he ends this year with nothing to show for it in those negotiations. after that, getting a deal with and doing those deals simultaneously in hopes of putting pressure on the eu for concessions will be his priority
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. australia, new zealand, these are countries that are looked upon favorably. i think johnson would like to come back to parliament and say we've done these deals. has beencountry that brexit, hasrvous by been made on the premise that it is a gateway to europe. that now is called into question by brexit. so all of these countries have varying degrees of importance. the eu is undoubtedly britain's largest trading partner even though its share of u.k. trade is shrinking, but that is the neighboring trade block. i think johnson will want something to show from those negotiations. guy: how long is boris johnson's honeymoon period? he has promised a lot. therese: we really need to see what he comes up with this year, but honeymoons don't last forever for any government. emmanuel macron has seen that in france.
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he came also to power with a majority, with a big mandate for change. we are seeing a lot of grassroots opposition to his pension reform. johnson can count on a large majority. he has the parliament, the strong support for brexit to carry him so far. if, after 2020, the trade friction that is inevitably going to happen with the eu starts to bite in those regions where he has won his electoral majority, we might start seeing some opposition and some questions raised, so that is why his major policy of leveling off is investing in those regions, and that is why the budget is going to be such a key development in the next month or so. guy: british papers full of talk over the weekend of various things. thank you very much indeed. alix: coming up, we are going to take a look at tomorrow night's new hampshire primary. we have less than 24 hours before voting begins.
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polls show that about 1/3 of voters remain undecided after the iowa fiasco. this is bloomberg. ♪
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♪ guy: live from london, i'm guy johnson. alix: i'm alix steel from new york. this is "bloomberg markets." pete buttigieg appears to have sealed his victory in iowa. to attention turns tomorrow night's new hampshire primary. joining us is david westin, who maybe we'll sleep sometime in the next nine months. it feels like if buttigieg was the story last week, biden is the story this week. david: maybe not in a good way. the question is what position is
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he and. we just had a meeting with some of the senior leadership of the biden campaign, and it was pretty clear they are not printing anything close to a victory. they say he will be competitive. they won't say what that really means. about florida and -- all abouta nevada and south carolina. guy: in terms of what this momentum is meeting, how important is it going to be? if we look back to the last election, who came out of iowa strongly? is it a useful indicator as to who is going to be the democratic candidate? david: it's a good question. historically, between new hampshire and iowa, you needed to have done well if you are a democrat and one or both of those states to carry on. the difference this time is we have so many candidates close to the top for, or even five if you include amy klobuchar, so it is not clear that the same rules apply. doesn't really lead to momentum?
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-- the kerfuffle in iowa has taken some of the buzz away from iowa. it's not there this time. alix: i thing i would use a stronger word, like disaster, when it came to iowa. [laughter] alix: what kind of money and endorsements are at stake at the end of new hampshire after we go through iowa? david: a great question. i think it is fair to say that looks like former vice president joe biden is in fourth place not only in the polls, but in the money. his staff here say they had a really good online week last week. they wouldn't tell us how good. at the same time, bernie sanders raised $25 million in january alone. pete buttigieg also has raised a lot of money, and does have a bit of lift coming out of iowa. if there is momentum, it may be some buttigieg momentum perhaps closing on sanders. for sanders, he has to hold on and have a strong first given the expectations, and he is,
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after all, from a neighboring state. david: when do we find out what the story from the first few states are going to mean for the big states, california, etc. when we come to month? when do we get a clear idea as to who has momentum, who hasn't momentum? as you indicated, some in the past have not done well in those early states, but have gone on to do well. hillary clinton may be an obvious example. david: the uncomfortable answered your question, we may not get that. the theory was before we started all this debt by the time you got to super tuesday, there would be some clarification. you would be down to two, maybe three candidates. right now, it looks like that might not happen. you have joe biden polling very well in south carolina and nevada, and tom steyer in second place in south carolina. it may be that we going to super tuesday with just a variety of candidates that creates a sort
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of chaos and uncertainty, a volatility we haven't had in the past going into super tuesday. guy: it's going to be fun to watch. the market certainly starting to pay attention to this one. david westin in manchester, new hampshire, thank you very much, indeed. we are going to have special coverage coming up from the new hampshire primary tomorrow night. it is all going to kick off with david and the rest of the crew, 7:00 p.m. eastern time. let's get back to the markets and focus on our stock of the hour. here with that, abigail doolittle. abigail: we are taking a look at shares of tesla. last week a move higher, and then lower. the company is back in the news as tesla's shanghai factory turns to service after a virus related shutdown. relative to the reopening of the factory in shanghai, china is helping test look at plant back up and going. the target is to produce 150,000 cars per year. the first customer deliveries began january 7.
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the shanghai model three is 2% cheaper than imports, and the factory reopening comes after having been closed for a week and a half. i mentioned the stock's big run last week, but that has been the story for the year. at one point, up more than 121% this year alone before falling 20%, and now a relatively more modest climb is taking place. a big piece of that move up is likely a short squeeze. we do have folks making bearish bets on tesla, and they perhaps have not been able to stand the pain or stay liquid in the face of the recent rocket ride higher. here we see the stock in white, the shortage in yellow. last week, a big bearish bet, the stock was pushed below $180 per share. midyear last year as the stock started to take off, now soaring, the shortage can keep shrinking to the lowest level over the last few years, 18%.
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this chart is not exactly a picture of tranquility or stability. it will be interesting to see whether core volatility is ahead for tesla. that is your stock of the hour. guy: abigail, thank you very much indeed. still ahead, oil steadies a little bit. crude is dipping now. $50.ot wti sub- we take you to chicago to talk about this more. it's time for features and focus. -- for futures in focus. this is bloomberg. ♪
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♪ york, i'm from new alix steel. guy: from london, i'm guy johnson. this is "bloomberg markets." time now for futures in focus. scott bauer joins us from chicago from the cme. exactlye trading almost
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at $50 right now. if opec+ doesn't act, do we see further movement to the downside? scott: i think opec+ is going to act, whether it is in a week or two week or in march. right now, the big question, is russia going to join in? the rest of opec is trying to galvanize that relationship here. i do think there is some downside concern. i think the market is pricing in right now that they are going to act somehow. alix: do you have a feeling of what the downside is? the rhetoric is if it breaches $48, you will have some selling at the banks wind up having to sell stocks. do you have a sense of what the downside could be? scott: $48 is definitely an important number. low that, it is really down around $42. i am not trying to paint that picture just yet, but that $48
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picture is really important. i think what is just as important is looking at the relationship of west texas to print. just a few -- to brent. it is under four dollars now. guy: brent crude 18% year to date. copper down by only 8%. why the different performance? scott: copper is really stabilizing, in my opinion. we own of that china is the largest consumer in the world of raw material. copper is the biggest play for china. it is stabilizing a bit, and i think that the bigger macro concern is in the oil space right now because of its far-reaching consequences. however, copper, as poor as it has been, if you look at the charts, it is stabilizing a bit. alix: it seems like part of it has to be the supply picture because we could be getting some resolution in libya, which would bring back one million barrels of oil a day from that region,
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versus copper come up to still under supply constraints in south america. do you want to short oil come along copper? is there a way to -- short oil, long copper? is there a way to play that? scott: i wouldn't look at them together, but three to six months from now, i would probably be more neutral on oil and bullish on copper. guy: what role is the dollar playing in all of this? we continue to see the dollar grinding higher. it is the safe haven trade. a lot of this stuff is priced in dollars. as we see the buck rising, is that going to put downward pressure on these commodities? how much of a factor is that? scott: it is a huge factor. six weeks ago, the dollar was under some pressure, and then coronavirus really hit the markets, and you're seeing that safe haven trade to the dollar. for the near future, there certainly is a lot of tailwind a hind the dollar, but any sort of tailwind we saw --
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behind the dollar, but any sort of stability we saw from the virus what affect the dollar as well. alix: it seems that the back half is going to wind up being ok, that we see some kind of demand recovery. if i look at the disruption on the curve when it comes to oil, i don't thing i've ever seen anything like that, the moves we saw from backwardation to containment. how do you position for may be a better half in the back half of the year? scott: remember why we are seeing that big disparity. it was just six weeks ago the attacks we saw that really drove the price of crude well over $60. it wasn't so much of a fundamental type supply/demand situation as it was a geopolitical event. if you take that out of theire, you are seeing this massive selloff, but you are obviously not going to see that big hi to the bottom we are seeing right now. nonetheless, we are seeing that
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situation right now, and i think you do have to position yourself to see crude coming back into line. like you said, that back half probably pops up a little bit. guy: one quick question, the ags. the chinese have set themselves up to buy a lot of agricultural products at of the united states. is it going to happen? scott: it's not going to happen. i think the u.s. realizes that. i think the u.s. realizes that, first and foremost, for the benefit of the world economy, they've got to get the coronavirus under control. if that means china has to postpone this promise, the phase one deal, three months, six months, nine months, i think that is going to happen. alix: really appreciate it. scott bauer of prosper trading academy. catch my interview on wednesday with bernard looney, new ceo of bp. it is kind of his coming out party on wednesday. i will be there for his first
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live tv interview as ceo at 12:30 p.m. eastern time. guy: you could have a very fast flight. that's all i will add. 747 the weekend, a british did jfk to london heathrow in under five hours. alix: no, i need my sleep. i need my beauty sleep. . that's why i'm in business. guy: it's almost too short, isn't it? you could be here a little early. ed arrived an hour and fortinet it's early. i don't think we've ever seen that before -- it arrived an hour and 40 minutes early. i don't think we've ever seen that before. coming up, we are counting you down to the european close. this is the picture right now. this is bloomberg. ♪
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guy: coronavirus cases continued to climb after last week's stock rally. yields are dropping on bonds. debbie g.i. and crude back below $50 a barrel -- wti and crude
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back below $50 a barrel. angela merkel's successor stepping aside, leaving the party in the country in political turmoil. and the scottish first minister tells boris johnson to grant another independence referendum. plus, that shock irish election that could put a united ireland back on the agenda. live from london, i'm guy johnson, with alix steel in new york. we are counting you down to the european close on "bloomberg markets." ♪ alix: let's take a look at u.s. markets. if you are just looking at equities, you may say it is a little bit of risk on. i may feel better about the global growth pictures. in other asset classes, the answer is definitely not. the 10 yr el

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